2015 (8) TMI 1483 - HC - Income Tax

Deduction u/s 80IB(10)(a) - whether issuance of completion certificate, after the cut off date by the Local Authority but, mentioning the date of completion of project before the cut off date, fulfil the condition specified in clause (a) of Section 80IB (10) read with Explanation (ii) thereunder - HELD THAT - In the leading case 2015 (10) TMI 2384 - MADHYA PRADESH HIGH COURT and connected cases decided today by a separate Judgment holding that if housing project approved on or after 1st April, 2004, the assessee can avail of the benefit provided completion certificate issued by the Local Authority is within four years from the end of the financial year in which the concerned housing project was approved by the Local Authority. If this condition is not fulfilled, the assessee who maintains work in progress accounting method and has claimed deduction under Section 80IB(10)(a) must suffer the consequence of disallowance or withdrawal of the benefit claimed by him on that count. These appeals are allowed by setting aside the impugned judgment of the Tribunal with regard to the deduction claimed by the assessee u/s 80IB(10)(a) and instead the decision of the AO to disallow the said deduction is upheld.

Summary

Issues involved:
Appeals by the Department regarding deduction under Section 80IB(10)(a) of the Income Tax Act for five separate Assessment Years.

Analysis:
In a judgment delivered by Hon'ble Shri Justice A. M. Khanwilkar, Chief Justice, and Hon'ble Shri Justice K.K.Trivedi, the High Court of Madhya Pradesh considered appeals filed by the Department regarding the deduction under Section 80IB(10)(a) of the Income Tax Act for five separate Assessment Years ranging from 2002-03 to 2006-07. These appeals stemmed from a common order issued by the Income Tax Appellate Tribunal, Indore Bench, pertaining to another assessee (M/s Global Reality). As a common substantial question of law was involved, all appeals were heard together and addressed in a single judgment. The primary issue raised by the Department in these appeals was related to the deduction under Section 80IB(10)(a) of the Income Tax Act.

In a separate judgment concerning I.T.A. No.40/2012 and connected cases, the substantial question of law was resolved in favor of the Department. The court noted that based on the reasons provided in the aforementioned judgment, the appeals filed by the Department in the present case should also be successful following the same legal principles.

Consequently, the High Court allowed the appeals by setting aside the Tribunal's decision concerning the deduction claimed by the assessee under Section 80IB(10)(a) of the Income Tax Act. Instead, the court upheld the Assessing Officer's decision to disallow the said deduction. The judgment concluded by stating that there would be no order as to costs in this matter.